Alberta cannabis producer strikes rare financing deal with bank
Atlas Growers, which moved its corporate headquarters to downtown Edmonton this week, announced a deal with ATB Financial Tuesday
|Report an Error|
Share via Email
A deal reached between ATB Financial and a central Alberta cannabis startup could change the way banks think about the booming weed business.
Atlas Growers, which moved its corporate headquarters to downtown Edmonton this week, announced a financing deal with ATB Tuesday.
The deal makes Atlas one of the first private cannabis companies in North America to get financing from an accredited financial institution.
“What we’re doing is we’re paving the way, basically, for other people in the cannabis industry and other companies,” said Jeffrey Gossain, the company's vice-president of operations.
“The banks haven’t really been keen on playing in this space just yet, and ATB Financial is the first to do it.”
Atlas raised $10 million in private capital for its 350,000-square-foot first phase of its production facility near Lac St. Anne, west of Edmonton.
Under the new financing deal, ATB – a crown corporation run by the province – will provide the remaining $6.25 million, allowing the company to produce roughly 80,000 kilograms of cannabis per year.
Without financing from a bank, companies are forced to get all their money from investors, which means the investors will retain a bigger portion of their company.
Gossain said he thinks ATB’s move will get other accredited banks thinking differently about cannabis.
“It’s a new industry. The banks are always conservative, especially accredited banks,” he said.
“So they always want to take their time and study the industry really thoroughly, which we know ATB has done.”
Teresa Clouston, ATB Financial's executive vice president of business and agriculture, said in an e-mail that the bank has equal interest in entertaining valid business proposals from various industries.
"Deals make sense for ATB when they provide the opportunity for us to deeply engage, listen and understand the customer’s plans and goals; evaluate those plans against our risk criteria, and determine where the best fit is for us and the customer,” Clouston said.
Atlas Growers’ Lac St. Anne facility will start seeding in June and be ready to sell by September, focusing heavily on medical marijuana.
The company plans to roll out the facility in three phases, eventually exceeding one million square feet. That would be bigger than the 800,000-square-foot Aurora Sky facility on the Edmonton International Airport land, which Aurora Cannabis has billed as the world’s largest licensed cannabis facility.